Colorado labor department officials have asked state lawmakers for $2.3 million to salvage some of the work left behind as part of a $35 million computer project that was dumped last year.

Lawmakers on the Joint Budget Committee tentatively approved giving the money on Monday, but only after extracting a promise from department officials to provide regular updates on the work.

Still, lawmakers were skeptical.

“My gut feeling is that you’re going to throw a lot of good money after bad,” said Sen. Ron Teck, R-Grand Junction. “My gut feeling is to cut your losses.”

Rick Grice, executive director of the state Department of Labor and Employment, said that Accenture, the contractor, left behind about 1 million lines of computer code and state officials don’t know whether it works.

The $2.3 million would provide funding for the state to hire nine extra workers and to cover the expenses of evaluating the code.

Grice said tossing away the code would waste money the state has already spent on the “Genesis” project, which was designed to track unemployment taxes and jobless benefits.

Last December, Accenture agreed to refund $8.2 million and to waive another $7 million of the $35 million that the state had been charged for the system.

Three pieces of the five-part system worked, but the two largest and most critical components – taxes and benefits – did not.

After the settlement, the state was stuck with a million lines of computer code related to those components and no documentation to figure out how that code was supposed to work.

“We played hardball with the contractor and we walked away in as good a shape as could have been expected,” Grice said.

Lawmakers challenged whether spending more money on a system that doesn’t work is the best way to proceed.

“You need to convince me that it is better to do this than to start anew,” said Rep. Bernie Buescher, D-Grand Junction. “How have you decided there is enough value there to spend $2.3 million on this?”

Sen. Dave Owen, R-Greeley, suggested that the Genesis project should be renamed “Phoenix” because this was an attempt to rise from the ashes.

Labor department officials said the state had spent about $12 million for the computer code, but got $8.2 million refunded so its investment is worth about $4 million.

With the $2.3 million, the department aims to hire the nine extra workers who would complete their evaluation of the code by November.

If lawmakers denied the $2.3 million, Grice said, they would be hurting state officials who fought Accenture to get so much money returned.

“It kind of feels like we’re being penalized for driving a hard bargain for settling up with the contractor,” Grice said.

To start again would cost the state much more than $2.3 million, Grice said, noting that the state of New Jersey recently hired Accenture to do similar computer work for a cost of $40 million.

Grice assured the committee that it would provide timely reports that would allow the state to stop spending money if the code could not be saved.

“If it becomes evident that this is unworkable,” Grice said, “we’d turn it back and we would not spend all of the money.”

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